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UNITED STATES - DEFINITIVE SAFEGUARD MEASURES (Continuation)
3. Procedural Arguments
(a) Korea Provides No Basis for the Panel to Request Confidential Business
Information from the United States.
4.94 Korea asks the Panel to request immense quantities of confidential
information from the United States. However, it has nowhere established that any
of the information meets the Article 13.1 DSU requirement of being "necessary
and appropriate" to the Panel's evaluation of Korea's claims. In fact, previous
panels have recognized the need to avoid the use of confidential information,
where possible. In this dispute, the non-confidential information on the Panel
record is sufficient. If the Panel considers that it needs anything more, the
United States is willing to meet the need with summaries or indexed data.
4.95 Most importantly, Korea has failed to state a prima facie case on any of
its claims. Therefore, any request for confidential information at this stage
would put the United States in the position of proving its measure consistent
with the WTO Agreement when Korea has not yet established the existence of an
inconsistency. This would entirely reverse the established burden of proof.
(b) Request of the United States for a Preliminary Ruling That Evidence Not
Submitted to the ITC or Addressing Events After the Decision to Take a Safeguard
Measure Is Not Admissible in This Proceeding
4.96 The United States requests that the Panel issue a preliminary ruling that
certain information included in Korea's first written submission is
inadmissible. First, several pieces of information in Korea's submission were
not submitted to the ITC. If the Panel were to consider that information in its
evaluation of the ITC determination, it would be conducting the sort of de novo
review that the Appellate Body has consistently rejected. Second, Korea
submitted and cited to information pertaining to the period after the United
States took the decision to apply a safeguard measure. Under the Safeguards
Agreement, both the determination of serious injury and the decision to apply a
safeguard measure must be based on information available to the competent
authorities or the Member at the time of the determination or decision.
Therefore, that information is irrelevant to any evaluation of the line pipe
safeguard measure.
4.97 Accordingly, the United States requests that the Panel rule that the
information described in the preceding paragraph is inadmissible, that it
request the removal of that information and arguments based on that information
from Korea's first written submission, and that the Panel disregard that
information and any arguments based on it.
C. FIRST ORAL STATEMENT OF KOREA
4.98 The following is the Korea's own executive summary first oral statement:
4.99 The US line pipe industry, in the second half of 1998 and early 1999, faced
a difficult situation. The industry had just enjoyed a peak demand period for 18
straight months; the industry built substantial new capacity to take advantage
of that domestic increase in market demand; but demand plummeted when the oil
and gas crisis hit. US line pipe industry performance began its recovery in the
second quarter of 1999. Imports, however, continued to fall in the first half of
1999, a decline that had commenced in the second half of 1998.
(a) Confidential Information
4.100 The 16 February letter of the United States confirms that Korea was
absolutely correct that the public data regarding absolute import trends does
not accurately reflect the trends of the confidential data. This is the reason
that the Panel also needs the other confidential data identified in Korea's
First Written Submission. The Panel is not obliged to frame its review and
decision on the basis of the information the United States may choose to
provide. The Panel should either apply adverse inferences to complete its review
or find that the United States has failed to meet its burden of proof, depending
on the issue.
(b) Judicial Economy
4.101 Korea urges the Panel to reach the issues of the safeguard measure even
after the Panel finds errors in the ITC investigation. Otherwise, it would lead
to dispute prolongation rather than dispute resolution. This authority is within
the Panel's discretion.
(a) The Safeguard Measure
4.102 For reasons never made publicly available, the US President completely
ignored the ITC's recommendations and imposed a remedy which was far more
restrictive and in clear violation of many of the basic principles for safeguard
remedies. The ITC had recommended a tariff-rate quota of 151,124 short tons with
a 30 per cent tariff for over-quota imports. The President imposed a tariff-rate
quota of 9,000 short tons per supplying country with a tariff of 19 per cent for
over-quota entries. The President's measure was excessive.
4.103 The US measure, a tariff-rate quota, violates Articles XIII and XIX and
Article 5. The US claim that Article XIII does not apply to a safeguard measure
under the SA must be rejected. The WTO is a single treaty. As such, all
provisions of the treaty must apply with full force and effect. Article II:2 of
the WTO Agreement expresses the intention of the Uruguay Round negotiators that
the provisions of the agreements included in Annexes 1, 2 and 3 must be read as
a whole. The General Interpretative Note to Annex 1A of the WTO Agreement
provides that "[i]n the event of conflict between a provision of the General
Agreement on Tariffs and Trade 1994 and a provision of another agreement in
Annex 1A to the Agreement, the provisions of the other agreement shall prevail
to the extent of the conflict" (emphasis added). Certainly, no conflict exists
between the SA and Articles XI and XIII.
4.104 The United States maintains that only the provisions of Article XIII which
are specifically incorporated in the SA continue in force and effect and cites
for its conclusion that the SA is a "comprehensive" agreement. But
"comprehensive" does not mean "exclusive." In Argentina - Footwear , the
Appellate Body specifically rejected the argument that since the SA did not
contain the "unforeseen development" language found in Article XIX, this was an
"express omission" from the SA. The same reasoning applies here. The preamble of
the SA states that the object and purpose of the SA is to "clarify and reinforce
the disciplines of GATT 1994" (emphasis added). While Article XIX is
specifically mentioned in the SA, it is not exclusively mentioned - all the
disciplines of the GATT 1994 are referenced. The object and purpose of the SA,
set forth in the preamble, is to "re-establish multilateral control over
safeguards and eliminate measures that escape such control." Yet the United
States maintains that the Article XIII requirements regarding tariff-rate quotas
were eliminated. If we were to follow the US argument, only tariff-rate quotas
have escaped multilateral disciplines.
4.105 In any event, regardless of what form a safeguard measure takes, it must
be "necessary to prevent or remedy serious injury and to facilitate adjustment"
in accordance with Article 5.1 and Article XIX of the GATT 1994. In Korea -
Dairy Safeguard, the Appellate Body upheld the Panel's conclusion that the first
sentence of Article 5.1 imposes such a very specific "obligation."
4.106 The Majority of the ITC explicitly concluded that the Petitioners' quota
recommendation of 105,849 short tons "would exceed the amount necessary to
prevent or remedy the serious injury ... . Our economic analysis indicates that
such restrictions would be excessive." The President's safeguard remedy, under
any reasonable calculation, is below that level of restriction and therefore,
"excessive."
4.107 The US position that they do not need to justify the measure before it is
imposed nor can the import performance be evaluated after it is imposed, renders
Article 5.1 meaningless.
4.108 No document exists in the record of the ITC investigation or the
establishment of the safeguard remedy, which demonstrates that the measure
imposed by the US President was "necessary." To the contrary, the evidence is
that the measure imposed is, in the words of the ITC Majority, "excessive." The
United States still has not attempted to point to any evidence to the contrary.
(b) The United States Impermissibly Excluded Mexico and Canada From the
Safeguard Measure
4.109 Article 2.2 provides that safeguard measures "shall be applied to a
product being imported irrespective of its source." Footnote 1, which addresses
the term "Member," is a footnote to the text of Article 2.1. It is not a
footnote to Article 2.2, which provides for MFN application of the measure. The
Appellate Body in Argentina - Footwear concluded that, by its very terms,
Footnote 1 only applies to (i) a "customs union" (ii) that is acting "as a
single unit or on behalf of a Member state." Korea sees no basis for concluding
that Footnote 1 can be read as two separate provisions. In fact, the only
logical reading from the text and its context is that this is a self-contained
provision, which applies to a customs union.
(c) The ITC Investigation of Increased Imports, Serious Injury and Causation
(i) Introduction
4.110 Safeguard relief is an extraordinary remedy that must be justified by
extraordinary circumstances. Another clear lesson from the jurisprudence is that
the safeguard measure is an action against fairly traded imports. Therefore,
only strict compliance with the requirements of each and every requirement of
the SA can justify a safeguard measure. The emergency and extraordinary nature
of the remedy must inform the proper analysis and interpretation of all the
requirements of the SA and the GATT 1994. The US argument that the emergency
nature is limited to the "measure" and does not apply to the situation
investigated is inconsistent with the Appellate Body ruling in Argentina -
Footwear.
(ii) Increased imports
4.111 With respect to the increased import requirement in Article 2.1, the
Appellate Body in Argentina - Footwear articulated that "not just any increased
quantities of imports will suffice." The Appellate Body based its reasoning on
the plain meaning of "is being imported," which, being in the present tense,
requires that the increase in imports be "present," not "past." It follows
directly from this language that the most recent period for which data is
available must be examined.
4.112 The United States does not argue that the import data of the last 12
months is not meaningful or that it is not available (after all, the
confidential data summarized in the February 16 letter reveals almost a 20 per
cent decline over two six-month periods). Rather, the US asserts that US
practice is to look at "full years." Korea submits that US practice must be in
accord with the SA, not vice versa. Article 4.2(a) provides that "authorities
shall evaluate all relevant factors of an objective and quantifiable nature."
Clearly, data concerning whether imports increased or declined over the last 12
months of the period is both relevant and quantifiable. Imports had decreased by
almost 20 per cent in the most recent 12-month period prior to the ITC
determination according to the United States letter of February 16. Relative
import trends also declined during the first half of 1999.
(iii) Serious injury
4.113 The fundamental inconsistencies and contradictions among the
Commissioners, in the absence of an adequate explanation and reconciliation in
the opinions, undermine the adequacy of the ITC Majority's determination in
terms of Articles 3 and 4.
4.114 Those disagreements about data were so fundamental that only three
Commissioners concluded that serious injury occurred by reason of imports. Three
concluded otherwise. There must be an adequate explanation of why and how the
Commissioners came to these contradictory conclusions. This is all the more true
if the ITC relies on confidential data which the United States does not provide
to the Panel.
(iv) Inclusion of data relating to other industries
4.115 The United States argues that there is no evidence in the record that OCTG
declines were more severe. While Korea agrees with the United States that both
OCTG and line pipe demonstrate the same downward trends, because both are being
pulled down by the decline in oil and gas rigs, OCTG dropped much more
dramatically. Exhibit 48C tracks the per centage relationship between net
shipments of OCTG and net shipments of line pipe. This graph confirms that in
1998 and 1999, OCTG's share of total shipments (of line pipe plus OCTG) drops
more dramatically relative to line pipe. This had a great impact on the
profitability of the producers which the ITC did not properly separate and
consider.
4.116 The ITC's own Staff Report recognizes there was a "collective operating
leverage effect." The fact is that the effect does exist and it was documented
by the ITC itself.
(v) The industry only experienced a one-year downturn
4.117 This industry had a record industry performance in 1997, continuing into
the first half of 1998. A temporary downturn from a peak performance period does
not demonstrate that the industry is in a state of "significant overall
impairment," particularly in an industry that experiences wide swings in demand
and profitability. This industry also kept investing throughout 1998/1999
because it recognized the ebbs and flows of its business and was investing for
the next upturn (which had already commenced).
(vi) The ITC should not have found that the industry is being seriously injured
when the industry no longer was suffering injury at the end of the period
4.118 What is most relevant is that the line pipe industry was fast recovering.
As the Panel held in US - Wheat Gluten, "we consider it essential that current
serious injury be found to exist, up to and including the very end of the period
of investigation." Korea prepared Exhibit 48D which demonstrates, based on the
observations and conclusions of the ITC, the US domestic industry, and industry
experts, the strong condition of the US line pipe industry.
(vii) There was no causal relationship
(1) Coincidence of trends
4.119 In Argentina - Footwear (AB), the Appellate Body sustained the Panel's
analysis of the causation requirement under Article 4.2(b) "it is the
relationship between the movements in imports ... (volume and market share) and
the movements in injury factors that must be central to a causation analysis and
determination."
4.120 The situation in line pipe presents a case of inconsistent trends -
imports began to decline at the same time as domestic industry indicators
declined. 1998 was composed of a very strong first half during which the
domestic industry indicators maintained their peak performance, and a very weak
second half during which indicators declined significantly: As all the
Commissioners recognized, the industry's poor health began "in the second half
of 1998." This two-period analysis by all six Commissioners contradicts the
statement by the United States that "the ITC did not compare data for the first
half and second half of 1998."
(2) Other Factors
4.121 The US causation decision did not comply with the standard set forth in
the AB report on US - Wheat Gluten. The United States considered only each
individual factor of injury because US law provides that the cumulative effect
of all the "other" factors or causes of injury cannot be considered.
4.122 This methodology obviously conflicts with Article 4.2(b) because the
United States did not consider whether the sum of all the other causes of injury
(inter alia (1) the oil and gas crisis which caused consumption to drop
dramatically from its high in 1997; (2) the build up of significant excess
capacity by the domestic industry (on an annualized basis, domestic capacity
increased by 25 per cent in 1999 compared to 1998); and (3) the elimination of
export markets and consequent ferocious domestic competition) was so great that
the effect of imports was diminished to a level that imports had less than a
"substantial" effect. Exhibit 48A illustrates the point.
4.123 The United States improperly attributed injury caused by other factors to
increased imports in the remedy recommendation as well. The ITC admits that it
was the combined effects of both imports and the oil and gas crisis which caused
serious injury and that the remedy recommended was also intended to address the
effects of both. Therefore, the remedy is not confined to addressing only the
injurious effect of imports.
(viii) Threat of injury
4.124 The Commissioners who found only threat of injury erred principally
because they assumed that imports would increase. Since imports had declined for
12 months, such a counterintuitive conclusion had to be substantiated by more
than mere "conjecture or remote possibility."
(ix) The United States has not demonstrated "unforeseen developments"
4.125 The ITC was under an obligation to demonstrate in its investigation that
the increased imports in this case occurred "as a result of unforeseen
developments "and of the effect of the obligations incurred by a Member under
this Agreement, including tariff concessions ... ."
4.126 The ITC Report contains no reference to a determination of the "unforeseen
developments" which caused the surge in imports of line pipe. The United States
cannot, in the course of a Panel proceeding, rehabilitate a finding that was
never made.
D. FIRST ORAL STATEMENT OF THE UNITED STATES
4.127 The following is the United States' own executive summary of first oral
statement:
4.128 There was an increase in imports in this case that was "sudden and
recent." Imports of line pipe increased on both an absolute and a relative
basis. On an absolute basis, imports of line pipe increased in each of the last
three years of the period investigated. Imports declined somewhat in interim
1999 (the first six months of 1999), as compared with interim 1998 (the first
six months of 1998), but only on an absolute basis. Moreover, imports remained
at such high levels in interim 1999 that they exceeded whole-year imports in
both 1995 and 1996.
4.129 Imports relative to domestic production followed a similar pattern to
absolute import levels, except that there was no decline over the interim
periods. On a relative basis imports reached their highest level in interim
1999, when they accounted for 46 per cent of the US line pipe industry's
production.
4.130 Korea tries to avoid this clear evidence of a sudden and recent increase
in imports by devising its own limited period for measuring imports. By asking
the Panel to focus only on the last six months of 1998 and the first six months
of 1999, Korea would have the Panel examine a small portion of the import data
in a certain way, and ignore the rest of it. Korea can only show a decline in
imports in the last six months of 1998 and first six months of 1999 if it
examines this period in six-month increments. If the import data for these 12
months are examined in different increments - for example, on a monthly basis -
there is no steady decline in imports.
4.131 The facts here are much different from those in Argentina- Footwear. The
ITC's decision is consistent with the approach of the Appellate Body in that
case. The ITC clearly paid special attention to the most recent import levels
and trends, those in 1997, 1998 and interim 1999.
4.132 Korea has failed to meet its burden of making a prima facie case that the
increase in imports required by Articles 2.1 and 4.2 did not occur.
4.133 The evidence of a significant overall impairment in the US line pipe
industry's condition beginning in 1998 was overwhelming. Serious injury to the
industry was clear from an examination of: domestic production, capacity
utilization, sales, market share, financial indicators, employment-related
indicators, the ratio of inventories to domestic production, and research and
development. Korea ignores most of these indicators of serious injury.
4.134 Korea's claims that the line pipe industry's performance indicators were
affected by declining OCTG sales does not hold up to scrutiny. Korea's argument
rests on two false assumptions: (1) that the largest component of average unit
costs for line pipe consists of fixed costs; and (2) that these costs were
disproportionately allocated to line pipe because OCTG sales fell to a much
greater extent than line pipe sales. Both of these assumptions are unsupported
by the evidence in the record before the ITC.
4.135 Korea tries to evade the overwhelming evidence of serious injury by
arguing that the US line pipe industry was improving at the end of the period
examined. Korea is wrong as a factual matter. It mischaracterizes the import
data by claiming that there was "a continuing decline in imports" at the very
end of the period. This was not so. Imports in May and June 1999 had risen again
to the very high monthly levels of 1998. Korea also relies on announcements of
price increases that were mostly made in "late 1999 and early 2000" after the
ITC injury investigation was finished, and which are not part of the record
before the ITC or this Panel.
4.136 The evidence of serious injury was extensive and Korea has failed to make
a prima facie case that the US line pipe industry was not seriously injured.
3. Causation
4.137 The ITC's causation analysis was fully consistent with Art. 4.2 and the
Appellate Body's decision in Wheat Gluten. The ITC examined the effects of the
increased imports, and the effects of other relevant factors, on the domestic
industry. By examining and then weighing these effects separately, the ITC
distinguished between the effects of increased imports and the effects of other
factors, thus ensuring that the effects of other factors were not attributed to
the imports.
4.138 The ITC found that the surge in imports and consequent shift in market
share from the domestic product to imports occurred at the same time that the
domestic industry went from healthy performance to a very poor performance.
4.139 The ITC found that increased imports, together with the import-led price
declines, caused domestic producers to lose significant sales, market share, and
revenue. This led to declines in other key indicators, such as production,
shipments, employment, and operating income.
4.140 Through this analysis, the ITC found that increased imports were an
important cause of serious injury and properly established the existence of the
causal link between the increased imports and the serious injury, as required by
Art. 4.2.
4.141 Korea is wrong in asserting that there was no coincidence in trends
between imports and the downturn in the line pipe industry's performance.
4.142 The ITC found that the evidence developed in its investigation suggested
that imports had significantly depressed domestic prices. The ITC had three
different types of evidence for this: (i) average unit values of imports; (ii)
quarterly pricing data which it collected, and (iii) questionnaire responses
from a wide range of industry participants. All three of these categories of
evidence pointed to the same result. Korea's critique of this evidence of price
depression is unpersuasive.
4.143 The ITC examined the effects of six factors, other than increased imports,
as possible other causes of serious injury. In examining these other causal
factors, the ITC distinguished the injurious effects of increased imports from
the effects caused by these other factors. It examined whether increased imports
were a "substantial cause" of serious injury. A "substantial cause" under US law
is "a cause which is important and not less than any other cause." This approach
ensures consistency with the guidance on causation provided by the Appellate
Body in Wheat Gluten. By examining all of the other factors in this way, the ITC
identified the effects of these factors alone, therefore distinguishing those
effects from the effects of imports, which were separately considered. Thus, the
ITC ensured that it did not improperly attribute to imports any injurious
effects caused by other causal factors. Through this process, the ITC also
established that the causal link between the increased imports and the serious
injury was genuine and substantial.
4. Threat
4.144 Korea's arguments challenging the determination of the two ITC
Commissioners who found a threat of serious injury are based on a misstatement
of the facts. The determination of the two Commissioners finding threat was
based on facts in the record before the ITC, not on mere allegation or
conjecture, as Korea claims.
5. Putting the Safeguard Measure in Context
4.145 The United States has already described the domestic industry's decline
into uniformly poor financial performance. Some additional facts serve to put
the line pipe safeguard into perspective. Korea accounted for 70 per cent of the
total increase in imports in 1998. Imports from Korea also increased in the
first half of 1999, as compared with the same period of 1998, in spite of
declining demand in the US market. Korean line pipe was imported at
exceptionally low prices - much lower than those charged by US producers and
most other import sources.
4.146 These facts demonstrate that the United States complied with Article 5 in
that it did not apply the safeguard measure "beyond the extent necessary." It
guaranteed imports a presence in the US market, since the 9000 ton exemption for
each country would allow the import of a substantial quantity of line pipe with
no supplemental duty. The 19 per cent supplemental duty was at a level
commensurate with the decline in US producers' prices in the first six months of
1999. Moreover, even with the addition of the duty, 1999 unit values for imports
would not rise to pre-1999 levels.
6. Korea has Failed to Establish that the Measure was Applied Beyond the Extent
Necessary
4.147 Korea has not presented any evidence relevant to determining whether the
line pipe safeguard is "commensurate" with the goals of Article 5.1 - remedying
serious injury and facilitating adjustment. This text establishes that the
condition of the domestic industry is the benchmark for the application of a
safeguard measure. It is also significant that this limit affects the extent to
which a Member may "apply safeguard measures." Since Article 5.1 applies to
"measures," and not the separate components of a measure, consistency with
Article 5.1 can only be analyzed with reference to the measure as a whole.
4.148 Korea compares the line pipe safeguard chosen by the United States with a TRQ recommended by three ITC Commissioners. However, the fact that one potential
safeguard measure falls within the Article 5.1 limit does not mean that changing
one aspect of the measure would push it beyond the limit. For example, suppose a
four-year tariff of 30 per cent was found to be commensurate with the goals of
Article 5.1. A 40 per cent tariff might be able to achieve the same goal in
three years. Both would be permissible under Article 5.1, first sentence.
4.149 Finally, Korea simply ignores certain aspects of the line pipe safeguard,
such as its duration and the size of the supplemental duty. In so doing, it has
failed to demonstrate anything about the measure as a whole and, thus, provides
no basis to even apply the relevant standard.
7. Korea has Failed to Justify Application of Quota Disciplines to the Line Pipe
Safeguard
4.150 The principles of Article XIII that are incorporated into the Safeguards
Agreement are the only provisions that are applicable to safeguard measures. The
object and purpose of the Safeguards Agreement is to create a "comprehensive
agreement." In so doing, it incorporates principles - and even one entire block
of text - from GATT Article XIII. It omits the provisions of Article XIII that
Korea now relies upon. To conclude now that Article XIII applies to safeguard
measures would be to reverse the Members' decision to include only some of those
provisions in the Safeguards Agreement. The Panel simply does not have the
mandate to do this.
8. Exclusion of Canada and Mexico from the Line Pipe Safeguard
4.151 Korea argues that footnote 1 of the Safeguards Agreement applies only to
customs unions. If the drafters had intended this result, the footnote would
have cited only to subparagraph 8(a) of Article XXIV. Paragraph 8, covers
customs unions under subparagraph (a) and free trade agreements under
subparagraph (b). Therefore, it is logical to conclude that the citation to
Article XXIV:8 in the last sentence of footnote 1 means that provision applies
to both customs unions and FTAs.
4.152 Korea argues that the location of the sentence does not make sense if it
applies to free trade areas. The United States disagrees. The first three
sentences of footnote 1 deal with the basic question of the relationship between
Article XXIV and the Safeguards Agreement, as applied to customs unions. When
the drafters chose to address Article XXIV as it affects both customs unions and
free trade areas, it made sense to put it with other provisions dealing with
that topic.
9. Korea's Request for Confidential Information
4.153 Upon further review of Korea's arguments, it is apparent to the United
States that Korea has not shown any need for the Panel to examine additional
pricing data to determine the consistency of the ITC's determination with the
Safeguards Agreement. To the extent that any comments in the United States'
first submission suggest otherwise, the United States wishes to correct the
record as to the its view.
4.154 Korea's contention that the Panel needs to examine additional price
information is mainly predicated on an isolated statement made in the dissenting
views of Commissioner Crawford that underselling was not any more prevalent
during 1998 and interim 1999 than in earlier periods. (ITC Report at I-71.) But,
regarding the fact upon which the ITC actually relied with respect to prices -
even Commissioner Crawford specifically acknowledged that there was persistent
and widespread underselling. She simply placed less emphasis on that fact.
4.155 A careful reading of the exact passages in Korea's brief which form the
basis for its request for additional pricing data shows that Korea is actually
asking the Panel to draw different factual conclusions from those drawn by the
ITC. Korea has no basis other than conjecture to assert that the Panel needs to
conduct a review of information in the confidential record to ascertain whether
Korea's unsupported allegations possess any merit. The complete version of the
US oral statement for the second session of the first panel meeting contains a
point-by-point refutation of Korea's basis for urging that pricing data from the
confidential record is necessary.
4.156 In a final effort to convince the Panel of the need to obtain confidential
pricing data, Korea quotes a statement in the post-hearing brief it submitted to
the ITC. The statement addresses a disagreement among the interested parties in
the administrative proceeding as to whether the size of the margins by which
imports undersold domestic products increased during 1998. Korea has not
disputed the prevalence of underselling - the specific fact about prices that is
relevant to the Commission's findings. The Commission did not mention or rely on
any increases in the size of underselling margins as a basis for its finding
that imports depressed domestic prices. Thus, Korea has failed to show that the
Panel needs to see confidential data to review Korea's challenge to the
Commission's findings and conclusions relating to pricing.
E. SECOND WRITTEN SUBMISSION OF KOREA
4.157 The following is Korea's own executive summary of its second written
submission:
(a) Confidential Information.
4.158 Korea and the Panel still lack fundamental information that has been
withheld by the United States for reasons of confidentiality.
4.159 The United States consistently has dismissed Korea's requests as
unnecessary. However, the fragmentary data actually produced by the United
States has confirmed just the opposite:
(1) The non-confidential summary of imports in the ITC Determination does not
accurately reflect the actual import levels in 1998 and 1999, as demonstrated by
the US 16 February letter.
(2) The information provided by the United States concerning Geneva Steel is
incomplete and thereby misleading.
(3) The information provided by the United States in its 23 April letter
concerning Lone Star similarly confirms a far different situation than
previously described by the United States.
4.160 Finally, the pricing data provided by the United States in its 23 April
letter remains fragmentary due to the confidentiality rules employed by the
United States. Nonetheless, the data still confirm, that underselling was a
market condition.
4.161 The data available confirms the need for the following additional
information:
(1) The confidential Economic Memoranda used to evaluate the remedy proposals
and the impact of various alternatives on the US industry. (See below).
(2) The papers used in the deliberative process by the President in reaching the
determination regarding the safeguard measure.
(3) The confidential version of the ITC Staff Report, providing fuller
explanations for the condition of the industry.
(b) The Panel Should Reach the Issues Raised by Korea With Respect to Both the
US Investigation as Well as the Safeguard Measure
4.162 With respect to issue judicial economy, Korea urges the Panel to exercise
its discretion to reach the issues raised regarding the safeguard measure even
after finding errors in the ITC investigation, due to a considerable on-going
impact of the US measure on trade.
(c) Standard of Review
4.163 Korea is requesting that the Panel, pursuant to Article 11 of the DSU, and
the Appellate Body decision in US - Lamb Meat, conduct an "objective assessment
of the facts."
(d) The Panel Should Reject the US Objections to Extra-Record Information Based
on the Decision of the Appellate Body in US - Lamb Meat
4.164 Korea would like to supplement its earlier arguments on this issue with
the recent holding of the Appellate Body in US - Lamb Meat, recognizing that a "WTO
Member is not confined merely to rehearsing arguments that were made to the
competent authorities ... ."
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